Indonesian wealth management - taking it to the next level

Transcription

1 Roundtable August 2013 Indonesian wealth management - taking it to the next level Wealth management is in its infancy in Indonesia. The key focus, therefore, is to bring products and services to a wider group of clients by penetrating the mass affluent segment in turn helping them understand the value of longer term investing, and ultimately enlarging the market opportunity for all industry participants. This requires the product offering to be broadened (as far as regulations will permit). And given how widely the population of Indonesia is dispersed, as well as its sheer size, those banks and other wealth managers who will be successful will be those organisations which are able to embrace technology and offer online and digital access in user-friendly ways. These were some of the views of leading players in the local industry at a roundtable in late August, co-hosted by Hubbis and. The discussion looked at the various business issues, opportunities and challenges in moving from current retail and affluent offerings to developing profitable and sustainable businesses. Chairperson Michael Stanhope Chief Executive Officer Hubbis Our co-host for this roundtable: Markus Russ Managing Director, Asia Pacific T E Markus.Russ@finnova.sg Rudy Fang Director, Sales & Business Development, Asia Pacific T E Rudy.Fang@finnova.sg Participants Ridwan Prasetyo Senior Head, Private Banking Wealth Management Group Bank Mandiri Glant Saputra Hadi Head, Wealth Management Product & Business Development Bank Internasional Indonesia Rubijanto Sutantyo Senior Adviser, Unit Bisnis Wealth Management Bank Central Asia Sonny Wahyubrata Executive Vice President Product Management Head Bank Danamon Sigit Prihatmoko Head of Strategic Planning Group Bank Negara Indonesia Lanny Hendra General Manager, Wealth Management, Priority International Banking & Country Marketing Head, Indonesia Standard Chartered Bank Bambang Simon Simarno Senior Vice President Deposit, Investment & Insurance Head UOB Indonesia Markus Russ Managing Director, Asia Pacific Rudy Fang Director, Sales & Business Development Asia Pacific 1

2 WHAT WEALTH MANAGEMENT MEANS IN INDONESIA Lanny Hendra: Wealth management is about providing better advisory solutions to meet the profiles and needs of each customer. The industry is in its infancy in Indonesia, having been around for only around 20 years. However, markets go up and down, so it is important to explain to clients that they need to think about investing for the long term, so they can therefore ride the downward-moving markets. This is especially the case with equities. Rubijanto Sutantyo Bank Central Asia The big focus for Indonesia is bringing wealth management to a wider group of clients, to penetrate the mass affluent segment, to be able to enlarge the market opportunity for industry participants. Ridwan Prasetyo: Wealth management business means building good relationships and giving the right financial advice to customers with a focus on how to increase their prosperity. As customers are getting savvier and more critical, it is very important for banks or financial institutions to improve the quality of their people in terms of products, market knowledge. and personal behaviour. This will hopefully ensure the sustainability of the business and better relationships in the long run, especially during volatile markets. Rubijanto Sutantyo: As an industry, we need to broaden our product offering beyond just time deposits. Glant Saputra Hadi: Wealth management is also not only about financial products advisory, but also about lifestyles. Wealth has existed in Indonesia for a long time via Chinese traders, for Sigit Prihatmoko Bank Negara Indonesia 2

3 Sonny Wahyubrata Bank Danamon example. But while the opportunity is here, the business is still at an early phase. Sigit Prihatmoko: The relationship is really based on the extent to which we can educate customers about how they choose their investments and manage their wealth. Sonny Wahyubrata: Bank Danamon is not yet a key player within the wealth management space. For us, we have viewed it more as a service to provide convenience to some of our customers, for example via specialised relationship managers (RMs) and priority access. Because products are very similar, it is difficult to find a competitive edge. CHALLENGES IN DEVELOPING A DIFFERENTIATED OFFERING Lanny Hendra: We are currently not really able to provide a solution for customers in terms of geographic diversification. The focus needs to be on a truly integrated approach. This is challenging in a market where the talent pool is shallow. Rather than hiring each other s RMs, we need to focus on grooming the younger practitioners from graduates upwards. This will expand the resources available for the market as a whole. Our challenge, as an industry, comes from the stringent regulations on the type of product we can offer our customers. Our challenge, as an industry, comes from the stringent regulations on the type of product we can offer our customers. This makes it hard to differentiate our product platform. Our Privilege Banking service, although rolled out in 2002, is still at a very early stage of development. I have always believed that product is a commodity, so the main way to differentiate the offering is how to package it as a solution, for example, how to bring the offering to customers and understand their needs via the right interaction and relationship driven by RMs. Hopefully customers can then see the value. Sonny Wahyubrata: For us, an RM means someone who is more experienced and has more sophistication when it comes to product knowledge. But given the shortage of talent available generally, we have to push people through the training process quite quickly. Bambang Simon Simarno: The main challenge for banks in Indonesia is competition in acquiring wealthy customers. Even if we are able to innovate, it gets copied very quickly by other players in the market. For the time being, however, while market growth continues to outpace the supply of competent and qualified 3

4 Rudy Fang individuals to service customers, the poaching of RMs will inevitably happen. Ridwan Prasetyo: The skills of the RMs and other front-liners need to be groomed from time to time. We have regular training for the frontliners, not only in terms of products and marketing skills, but also in psychology, culture, real sector industries and even military training to get more knowledge and discipline. BUILDING ROBUST INFRA- STRUCTURE AND A BROADER USE OF TECHNOLOGY Lanny Hendra: Having the right platform definitely helps in building a sustainable wealth management offering. As for now, foreign banks seem to have a competitive edge in terms of technology given the benefits of operating as part of a larger international group, but local banks can continue to innovate by building a strong platform of infrastructure. Sigit Prihatmoko: The challenge in using technology is to access the second and third generations. We need to develop more sophisticated products and more advanced technologies to do this. Glant Saputra Hadi: Also, as the systems requirements become more complicated, they need to be more flexible in terms of how they interact with the core banking systems. Markus Russ: When looking at the role of technology in terms of the wealth management offerings in Europe, a lot more customers are embracing online and mobile banking. I see Indonesia going this way especially in terms of mobile. Markus Russ Banks in markets like Singapore and Hong Kong are encouraging more transactions via mobile offerings, to try to make the relevance of products and services more client-centric. For example, they are doing a lot more with the data they already have on their platforms. 4

5 Lanny Hendra: For simple products and more straightforward transactions, mobile banking will become popular quickly. But I think that wealth management is a bit too complex for any real traction to take place in the near future. Rudy Fang: As an example of some trends in other markets, OCBC Bank in Singapore has just launched a new concept to enable customers to buy a pre-defined amount of blue-chip equities from the Singapore Stock Exchange every month via internet banking. Ridwan Prasetyo Bank Mandiri HOW TO BETTER ENGAGE CUSTOMERS AS THE INDUSTRY EVOLVES Sonny Wahyubrata: Consumer banks remain the main platform for wealth management products to flourish. Insurance companies offer unitlinked products, but banks also operate in this segment, too. There are some IFAs, but nothing compared with what exists in more developed markets such as Australia. Indonesian customers are still bankcentric; they trust their banks and perceive the advice they get from them as trustworthy. Banks are still, therefore, the source of the majority of products. Glant Saputra Hadi: I observe that although wealthy individuals in Indonesia tend to be entrepreneurs and thus have debtor-lender relationships with the local banks, the second generation of these old money individuals seem to choose foreign banks for managing their wealth. Lanny Hendra: Local banks have the pool of customers, so the focus by those organisations needs to be on sharpening the value proposition. As a foreign bank, we find it challenge to grow our customer base. Engaging existing customers is easier than trying to grow the customer base via wider education. Rubijanto Sutantyo: Cross-selling is essential to make the most of the large customer base we have. Glant Saputra Hadi Bank Internasional Indonesia Bambang Simon Simarno: Penetration of wealth management products in Indonesia remains very low. In terms of acquiring new customers, we have assessed various ways to improve product penetration through crossselling, but the older generation are not interested in digital technology. So if we are looking to try to sell more mutual funds online, for example, yet our target segment is the affluent customer who is around 40 or 50 years old, the chances are that they won t really embrace that. 5

6 Bambang Simon Simarno UOB Indonesia So if we are looking to try to sell more mutual funds online, for example, yet our target segment is the affluent customer who is around 40 or 50 years old, the chances are that they won t really embrace that. The constraints in Indonesia of regulation, technology, tax and products lead many wealth individuals to invest overseas. The wealth management industry is restricted from offering a wider set of products and services to customers as a result of the tighter regulatory environment. And since 2008, the industry has been more stagnant. Everybody is operating and competing on the same playing field, thus making it very hard for a Bank to differentiate its offering. A very key point in developing the wealth business comes from the ability of the bank and its wealth managers to develop a meaningful relationship with their clients. of them keep it overseas for their children s future, such as education, and there are various other reasons. In general, the wealthiest Indonesians have a more comprehensive strategy for portfolio-building, so since the majority of their wealth is held within their business in Indonesia, they look to offshore centres to hold some of their investment funds. Glant Saputra Hadi: The constraints in Indonesia of regulation, technology, tax and products lead many wealth individuals to invest overseas. Sonny Wahyubrata: Yield is not the reason why some Indonesian customers hold money in Singapore or other offshore centres. For example, some Lanny Hendra Standard Chartered Bank 6

7 Contact details and profiles of participants Ridwan Prasetyo Senior Head, Private Banking Wealth Management Group Bank Mandiri Glant Saputra Hadi Head, Wealth Management Product & Business Development Bank Internasional Indonesia Rubijanto Sutantyo Senior Adviser, Unit Bisnis Wealth Management Bank Central Asia Ridwan Prasetyo has worked in the asset management and banking industries for more than 10 years. Prior to joining the wealth management division of Bank Mandiri, he held various positions in strategic marketing development for investment and insurance products at Manulife Asset Management, Standard Chartered Bank, and Mandiri Manajemen Investasi. He holds a Master s degree in Financial Economics from Boston University. E Ridwan.Prasetyo@bankmandiri.co.id Glant Saputra Hadi started his career in 2002 in the banking industry, and joined Bank Internasional Indonesia in 2006 as a senior manager. He is 34 years old and married with two children. He received a Bachelor of Commerce in Finance & Marketing, and a Postgraduate Diploma of Business in Finance & Economics, both at the Curtin University of Technology, Western Australia. E GSHadi@bankbii.com From 1993 to 2002 Rubijanto Sutantyo held various roles within Bank Central Asia, the last of which was as vice branch manager for marketing and credit at the Gajah Mada Branch in Jakarta. He then worked at Citibank Indonesia from 2002 to 2007, where his last position was vice president for international personal banking at Citibank Singapore. From 2007 to 2011 he was then a private banker for Credit Suisse in Singapore, before returning to Bank Central Asia in 2011 in his current role. E rubijanto_sutantyo@bca.co.id 7

8 Contact details and profiles of participants Markus Russ Managing Director, Asia Pacific Markus Russ has been managing director of finnova (Asia Pacific) since August 2012 and is now based in Singapore. Before that he was working for finnova AG Bankware in Switzerland as regional manager APAC and as Consultant, consulting more than 100 banks in Switzerland on IT banking solutions. Markus started his career back in the days in the financial services industry in Germany and added later a doctorate in business economics with focus on IT. Having this background, Markus is now supporting s international expansion into the APAC region. E Markus.Russ@finnova.sg Sigit Prihatmoko Head of Strategic Planning Group Bank Negara Indonesia Sigit Prihatmoko is currently the head of strategic planning group for Bank Negara Indonesia, where he advises the management team on key strategic issues. He is in charge of the annual strategic business planning process to drive the alignment of strategies and objectives, and to develop and articulate of the vision, mission, strategy and objectives for long-term planning, as well as drive strategic communications to cascade internal and external to ensure adoption and alignment of strategic initiatives and define and evaluate in-organic and business development opportunities. He has been with the company for more than 15 years, assuming various roles including Project Manager of the contact center, project manager of the multichannel strategy, head of trade finance, and manager of the it division. Sigit graduated from Gadjah Mada University, Yogyakarta, Indonesia with Magister Management, specialising in Finance, and a Bachelor of Electrical Engineering and Communication at the same university. He is a Certified Documentary Credit Specialist (CDCS) from IFS Learning in the UK. Lanny Hendra General Manager, Wealth Management, Priority International Banking & Country Marketing Head, Indonesia Standard Chartered Bank Lanny Hendra is currently the general manager of wealth management, priority, international banking & country marketing head at Standard Chartered Bank in Indonesia. She is responsible for the strategy, product and service offerings and relationship management of the wealth management business across the franchise in Indonesia. Lanny joined Standard Chartered Bank as general manager wealth management in January Prior to this, she was the segment marketing head of the consumer bank at Citibank for 13 years, and prior to that she worked for Commonwealth Bank in Sydney, Australia, for two years. Lanny obtained her Bachelor degree in Accounting from Macquarie University in Sydney, Australia. She is the proud mother of two children, and enjoys reading, travelling and spending quality time with her family. E Lanny.Hendra@sc.com E sigit.prihatmoko@bni.co.id 8

9 Contact details and profiles of participants Bambang Simon Simarno Senior Vice President, Deposit, Investment & Insurance Head UOB Indonesia Sonny Wahyubrata Executive Vice President, Product Management Head Bank Danamon Rudy Fang Director, Sales & Business Development, Asia Pacific Since August 2008, Bambang Simon Simarno has been head of deposit, investment and insurance at UOB Indonesia. In this role he is responsible for: personal financial services (individual customers) non-lending profitability; actively managing all non-lending products activities, development, pricing, promotion and strategy; managing the bank s liabilities products portfolio and activity; developing and maintaining working relationships with third-party Investment and Insurance product providers; the product specialist team to assist wealth management product sales; sales internal control and support to ensure proper implementation of regulation and sales due diligence; and supporting business in developing sales incentive scheme and KPI setting for relationship managers and personal bankers. He has previously held various roles at DBS Indonesia, Standard Chartered Bank, and HSBC. He was educated at the University of Toronto, Canada, obtaining a Bachelor of Arts in 1998, majoring in Commerce and Economics. Sonny Wahyubrata first joined Bank Danamon in He had various roles within the bank as account manager and branch manager before being seconded in 1995 to the bank s subsidiary in Hong Kong as chief executive officer. After returning to Indonesia, he left the bank From 1998 to 2000, Sonny worked for the Indonesian Banking Restructuring Agency in the risk management division. He rejoined Bank Danamon in 2001, and held various positions within the bank, including corporate affairs head, regional head, wealth head, and his latest position as product management head. E sonny.wahyubrata@danamon.co.id Rudy Fang has been sales & business development director of finnova (Asia Pacific) since August He is a Singapore citizen with 20 years of experience in sales and services roles in consumer banking (retail banking, priority banking, wealth management) and banking IT industries covering Asia Pacific markets. Rudy loves to enjoy local food and explore nature, in Singapore and elsewhere. E Rudy.Fang@finnova.sg E bambangsimon@uob.co.id 9